Research Paper On MC Donald's

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Term paper on

Study on the Management of

Mc Donald’s

By :

Arjun S A

Bcom hons-Sec 2-Semester 3

Roll no 312

To :

Prof(Dr)Meghna Malhotra

Associate professor - department of commerce

Hansraj College, University of Delhi

Submitted on 15/09/2022

Acknowledgement

I would like to express my special thanks of gratitude to my mentor cum teacher Prof.
(Dr)Meha Malhotra,who gave me the golden opportunity to do this wonderful project of
Management functions on Mc Donald’s ,to enchance my knowledge on research in the study
of management who also helped me in completing my project and made me aware of lot of
things in management principles and applications

I also Thank all the researchers and authors who contributed to the management field
and analysis of the sources which I have used. A special thanks the Mc Donald’s corporation
for publishing their mission, vision and reports of revenue,which made me understand and
draft a lot of information on this research paper.

I also thank my family&friends who helped and supported me for this resourcable
paper and made me enchance with my skills

Index

S.No Content Pages

Introduction
Planning

Organising

Staffing

Controlling

Directing

Success Strategy

Conclusion

bibliography

Introduction

Mcdonalds is the largest fast food company which was founded in 1995.It is
operating over 121 countries,over 35000 locations with 1.5 million employees.It started it
franchising also from 1995.It was started with a vision to be the world’s best quick service
restaurant experience.Being the best means to them is that providing outstanding
quality,services,cleanliness and value.It wanted to be customers favourite place and way to
eat and drink, their worldwide operations are aligned around a global strategy called the plan
to win,which centers on an exceptional customer experience.They are commited to
continously improving their operations and enhanching their customer experience.

Planning

Planning is determination of courses of action to achieve desired goals. Thus,


planning is a systematic thinking about ways & means for accomplishment of pre-determined
goals. Planning is necessary to ensure proper utilization of human & non-human resources. It
is all pervasive, it is an intellectual activity and it also helps in avoiding confusion,
uncertainties, risks, wastages etc.
Scan of the Environment

This will cover a range of concerns for the business. The investigation of the internal
and external microenvironments that affect the business is included in an environmental scan,
also referred to as a PEST analysis. While external analysis assists the company's
management in identifying opportunities and strengths, internal analysis typically identifies
the company's strengths and flaws.SWOT analysis is a useful tool for conducting this study.
Michael Porter and other psychologists created a paradigm that can be used to industry
analysis.

The following SWOT analysis shows MacDonald’s current position in the


marketplace, its core competencies, and possible improvements which can be utilized to
advance the strategies of the business.
Strengths

● Since the business has been around for a while, many individuals have used their
products and can therefore relate to them.
● They also have a competitive advantage over many places thanks to their global-
local presence, which serves numerous nations.
● It makes use of a potent advertising and promotion effort that has been made
possible by recent advancements in internet usage.

Weakness

● The company has over the years experienced a negative public perception that its
products are of low nutritional value.
● Because of lower disposal income, people have resorted to spending less on fast
food.
● The affiliation of McDonald’s with the American obesity epidemic gave a negative
picture for the company.

Opportunities

● Further investment in charities such as Ronald McDonald’s house has made it


possible for the company to expand its operations and made its brand name well
known.
● Creativity and innovation within the product development and variety of choices in
the store has made the company design new and more personalized products.
● New greener policies and conversation with regard to the disposal of wastes and
packaging of products has necessitated the company to influence a greater market.

Threats

● There has been a shift from fast food to healthier operations in the world today thus
posing a threat to products of this company.
● The products that MacDonald’s company offers are highly substitutable products thus
a threat in terms of its products not obtaining an upper hand.
● The highly competitive and mature marketplace today is also a threat to the
company.

Due to the high competition in the market, budget-oriented planning in MacDonald Company
or even forecast-based planning has proved to be inadequate for the company to maintain its
competitive advantage in the market. The management of the company has therefore resolved
to strategic planning to improve their performance in the highly competitive market
environment. This method works effectively because it defines some key issues such as the
objectives of MacDonald Company and the internal and external situation in the company
(Schlosser, 2007). Furthermore, the method, strategic planning, is used to implement and
evaluate the progress in the company. It also assists in making the necessary adjustment in
the company so that it can enable the company to maintain its positive image and also
improve the quality of food they provide to the market segment they served in the market.

Organising

It is the process of bringing together physical, financial and human resources and developing
productive relationship amongst them for achievement of organizational goals.

McDonald Company has been using pricing as a key marketing tool to help position
its products favourably in the market. The pricing strategies that McDonald's intends to use
when setting its prices in the market are as follows: (Aaker, 2009). Competitive pricing, cost
plus markup, loss leaders, closeouts, versioning, bundling, and quantity discounts are some
examples of these tactics.

McDonald's should employ competitive pricing in the following ways in order to


maintain its competitiveness. The management of McDonald's should keep an eye on what
the rivals are doing and then price their goods somewhat lower. Because this plan is
considered collusion in some jurisdictions, it should be utilised with caution. McDonald's
should price its products using cost-plus pricing, which can be done by just looking at the
profit margins anticipated. When there are excess goods in its stores, McDonald's must
sometimes employ a close-out method (Armstrong, 2009). Instead of maximising revenues,
this method seeks to minimise losses. The marketing division has suggested that the business
provide trade discounts as a way to draw in the market's heavy users category of consumers.
Similar to quantity discounts and bundling, this tactic is effective. The only distinction is that
bundling is a tactic whereby the business establishes a pricing for a client who orders things
in bulk

Staffing

It is the function of manning the organization structure and keeping it manned. Staffing has
assumed greater importance in the recent years due to advancement of technology, increase in
size of business, complexity of human behavior etc.

McDonald’s provides highly structured training to the employees. Primary workers


are first taken through the basic crew training system. The program consists of on the job
training and is largely vocational. Each stage of development helps the crew level to get new
training program with the skills becoming more complex and generalized.

Training begins immediately after joining the company. Each restaurant has its own
video player and training room. Step by step manuals and video tapes teach every detail of
the operations and functions in the restaurant in McDonald’s. Trainers use a series of
checklists as new crew members move through the restaurant.

Once a crew trainer has been promoted to swing manager and when he/she perform
successfully. They are eligible for the Management Development Program. Training provides
technical and functional management skills for employees at each level of their carrier. The
Basic Management Course teaches leadership, time planning and crew recognition.

Once a front crew member has progressed to the position of assistant manager, he/she
is eligible to attend Hamburger University also. More than 2500 managers and potential
franchises take part in the Advanced Operations Course.

● Training and development

McDonald’s know very well how to increase the quality, customer satisfaction,
production and innovation. The culture of McDonald has helped the organization to increase
its market share and profitability. Training and development also helps in getting a step ahead
in competition with other fast food industries and McDonald’s always keeps on making
efforts to improve job skills and quality

● Education to youth

McDonald’s is committed to the education of young employees in the organization.


Especially for school age employees McDonald’s provides various education facilities which
the employee to take away equally with the career at McDonald’s.

Directing

It is that part of managerial function which actuates the organizational methods to


work efficiently for achievement of organizational purposes. It is considered life-spark of the
enterprise which sets it in motion the action of people because planning, organizing and
staffing are the mere preparations for doing the work.

Plans, finances, and procedures are used to the most successful techniques into
practise. In order to provide high-quality meals and other amenities like lodging, the
implementation at McDonald's has been done through the use of resources and staff
incentive.

The manner the plans and tactics that have been adopted have been put into practise
will determine how effective they are. For instance, McDonald's is a global corporation,
therefore individuals responsible for putting the suggested ideas into action differ from those
who are developing them. As a result, the implementations must be shared in order to gather
sufficient justification for the development of such a programme.

Communication is very important because it allows everyone who will participate in


implementation to be aware of what is to be done. Furthermore, it will enable all the
managers especially the line managers to understand what is to be done in the company

In terms of operations, supply, and training programmes, a centralised organisation is


predominant. McDonald's official organisational structure divides the company into
divisions, and each employee is well-versed in the duties for which he is responsible. The
organisation does not become bureaucratically rigid as a result of these standard operating
procedures because every person is dedicated to achieving their objectives. The
organisational structure selected supports performance and is in line with the restaurant's aim
of offering dependable quality and excellent service

Controlling

It implies measurement of accomplishment against the standards and correction of


deviation if any to ensure achievement of organizational goals. The purpose of controlling is
to ensure that everything occurs in conformities with the standards. An efficient system of
control helps to predict deviations before they actually occur.

For the implementation process to succeed in every company the management should
appoint some people who will be monitoring the whole process to ensure that implementation
is done as per the initial plan. MacDonald can ensure the effective implementation of the
selected strategies by following the procedures. The first step is defining the parameters to be
measured in the company and this should be followed by defining the target values of the
implemented parameters. The third step is performing the measurements which have been
adopted in the previous stages. Lastly, the actual result should be compared with the planned
or expected results so that effective strategies are identified and those strategies which do not
work are eliminated. The managers should exercise enough care to ensure that the company
is maintaining only the effective strategies in the company.

Every organisation needs to have some people in charge of monitoring the


implementation process to make sure it proceeds according to the original plan if it is to be
successful. By adhering to the guidelines, MacDonald may make sure that the solutions
chosen are implemented successfully. The first step is defining the parameters that will be
used to measure the company's performance, and the next step is defining the target values
for the parameters that will be used. The third step entails carrying out the measurements that
were used in the other phases. Last but not least, it is important to compare the actual
outcome with the anticipated or intended outcomes in order to identify successful techniques
and discard those that are ineffective. The managers should take sufficient precautions to
ensure

At McDonald's, management consists of a team of driven employees that are guided


by clear policies that keep them on course. The line manager is responsible for ensuring that
the staff adheres to the standards. In a broader sense, each franchise is required to adhere to
the tight supplier policies and quality standards (Long, 2006). This is done to make sure that
negligent franchisee behaviour won't put the brand's reputation in jeopardy. The McDonalds
Corporation supports Hamburger University's training programmes for its staff. This is done
to make sure that workers understand the benchmark and how to improve any performance
flaws to satisfy these standards.

What retains employees is a flexible work schedule, a culture that values fun, training,
and a good work-life balance.

Secret of success

CEO

'The more you sweat the more you get',This was the quote of Ray Groc.He was the
founder and innovator of Mc donald. We could see the well developed business now a days
has been grown up by a group of friends,family and so on but we have a different story
here.The Mc donald was first founded by Richard and Maurice Mc donald who were brothers
,they had a small hamburger shop which earned them a quite good revenue.Ray Groc was a
Milkshake machine salesmen who came to Mc donald to sale the machine and he saw that it
was a shop where people were happy even if they stood in a long queue to buy burgers and
was very much happy on the taste so he went in and looked at the shop ,he found that they
had a very good system of serving burger in maximum 1 minute in a well arranged system
and machines and also employers.

So,He meet the brothers and asked them to make him as their agent for expansion but
first they refused and later on approved so Ray worked well for his expansion as franchisee
agent and has opened a lot of branches all over america but the revenue that he got was very
minimum which is only the commission.

One day his life changed to a greater height when he meet harry sonneborn who
insisted him to buy lands and rent them for franchising and Ray groc bought the Mc donald
from both the brothers at 2.7 million dollars and started his expansion with lot of lands that he
bought.This generated a huge revenue as he earned more revenue in real estate than in sale of
burgers.

The recenue was increased by the sale of burgers,Royalty and also the revenue from
the rent of land which played huge role in the revenue.

Company

The fast food comapany serves 100 companies in 2020,The craze for its food is seen in wide
parts of the world.It focuses on consistency which is first USP of the company.wherever you
walk in a Mc donald you feel the same atmosphere that is what makes them reach better.The
company followed the mottos of Ray kroc which was Quality,Service,Cleanliness,Value
which made them launch a training school which is called hamburger University in 1961.
This university still offers servjces for franchises which is one of the reason for its
consistency success.

In countries like America,Canada and Australia has a good brand value as people of the
country has their childhood attcahed with it.It innovates through the feedback received by the
customers which can be briefed with an example ,A group of soldiers of United States wanted
to buy food in Mc donald but they were in their uniform where they have rule of not to get
down from their car.So the company created a solution of this by delivering the food to their
car which later turned into drive in restaurants by starting of a drive in restaurants in a army
area.This also later made way for online ordering.

The company earned a revenue of 2,322.3 crores USD in year 2021

Here's how McDonald's makes money

from its franchises:

- One-time franchise fee of $45,000

-3month base rent of $229,000 or

-percentage rent of 28% of sales

-4% commission on sale

Advertising and promotion fee

(Not less than 4% of sales)

We can be summarized with the following to understand their success.

•Product Innovation

Product innovation has always been McDonald's top marketing priority. Instead of just
selling burgers and fries, the fast-food company has expanded its menu to include a number
of other items.McDonald's offers so much more, including flavoured fries, a vast selection of
burgers, and cold and hot beverages.In fact, the company has made a name for itself as a one-
stop shop that caters to all age groups and has something to offer every member of the
family.McDonald's has also made sure that it develops throughout time, adjusting to the
newest trends and requirements, in order to provide the meals to its customers.McDonald's
partnered with numerous online delivery apps including Uber Eats, Zomato, Swiggy, etc.
despite having its own delivery app and website.

•Availability and Location

The company has also introduced other food-related themes in various nations. You may now
have a teriyaki-flavored burger and fries if you fly to Japan.Similar to this, McDonald's
created a variety of vegetarian burgers in India to accommodate vegetarian consumers, with
the Mc Aloo Tikki being the all-time favourite.Exploring the cultural diversity of the world
has always been advantageous to the company and a top priority. This has always made it
possible for McDonald's to maintain its popularity.The company has also made sure that
clients won't have to search for their preferred food for very long. According to Statista,
McDonald's operated and franchised 39,198 locations globally in over 119 markets in 2020

•Marketing and Promotional Strategy

Since the brand's inception, McDonald's has profited from the high calibre of cuisine it
provides. People have always loved burgers, and in the early days, word-of-mouth marketing
was sufficient to make the brand popular.But over time, the business has made careful to sell
the brand through a variety of channels. McDonald's has long been a marketing innovator,
from well-known taglines to the well-known mascot.I'm Lovin It has grown to be the most
famous tagline ever.

•Affordable Pricing

McDonald's has traditionally been regarded as an inexpensive fast food restaurant. Burgers
from McDonald's are quite reasonably priced all across the world, not only in India.A low-
cost strategy is not the only one that the brand employs, though. You may have observed that
when you go to a McD location, the staff would suggest a combo over a single item. They
would explain how you could add a soft drink to your order of a burger and fries for less
money.The business adheres rigidly to bundle pricing, which is what it is. The goal of the
reduced combos is to enhance sales, which boosts the business's bottom line.

Conclusion

Lastly, it's essential to consider that McDonald's has a clear organisational orientation
supported by a solid mission and vision statement. The company's value statement also aids
in the accomplishment of its strategic objectives. Despite operating in a highly volatile
market with constantly changing macro and micro environmental elements, the company has
been able to resist environmental dynamics, which has helped it accomplish the majority of
its strategic objectives

Bibliography

Planning ,Organising, Staffing, Directing, Controlling

https://business-essay.com/strategic-planning-process-in-mcdonalds-company/

Accessed on 13/09/2022

Sucess story

CEO
https://youtu.be/osm_xbaCYVI

Accessed on 13/09/2022

Company

https://youtu.be/71PzHZvBoXs

Accessed on 13/09/2022

Success strategy summary

https://www.marketingmind.in/mcdonalds-marketing-strategy-that-has-made-it-a-
global-success/

Accessed on 13/09/2022

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